The support and the resistance are identified as the 23.6 percent and the 14.6 percent projection levels of a downward wave C from $6,352. This is the third wave of a three-wave cycle from $7,348. It is capable of travelling to $5,379.
Three waves make up the wave C. The second wave labelled b is driving the current bounce which may be limited to $6,122. A retracement analysis on the fall from $6,352 to $5,725 reveals a similar resistance at $6,112, the 61.8 percent level.
A break below $5,980 may cause a loss to $5,873. A further fall could signal the continuation of the downtrend towards $5,750.
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*** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.